Q3 2017 highlights: •Comparable EBIT increased by 12% to EUR 351 million (314 million in Q3 2016). •Good growth in deliveries and strong operational efficiency with no significant maintenance activity. •Strong operating cash flow at EUR 486 million (506 million). •Net debt decreased to EUR 623 million (1,479 million). •UPM announced a new focused growth project at the UPM Chudovo plywood mill in Russia. •UPM announced the next step towards entering a new sustainable biochemicals business. Q1-Q3 2017 highlights: •Comparable EBIT increased by 8% to EUR 926 million (859 million in Q1-Q3 2016). •Solid profit performance continued through a turn in input cost environment. Click Read More below for additional information.
Company Delivers EPS in Line with Guidance and Strong Operating Cash Flow; Continued Progress on Strategic Transformation and Separation
- Delivers GAAP EPS of 17 cents and adjusted EPS of 27 cents
- Total revenue of $4.2 billion, down 3 percent, or 4 percent on an adjusted constant currency basis
- Services margin of 9.4 percent, up 1.6 percentage points on an adjusted basis
- Document Technology margin of 13.1 percent, down 0.8 percentage points
- Cash flow from operations of $370 million, up $99 million
- Affirms and narrows full year 2016 guidance
- Separation remains on track to complete by year-end
Xerox (NYSE: XRX) announced today its third-quarter financial results and reaffirmed its full-year guidance. The company reported continued progress on its strategic transformation program and remains on track to complete its planned separation into two independent, publicly traded companies by year end.
“In an important period for Xerox when our separation-related activities ramped up significantly, we delivered solid financial results despite challenging market conditions. This reflects our commitment to executing on all aspects of our ambitious agenda, including our strategic transformation and achieving our 2016 financial objectives,” said Ursula Burns, Xerox chairman and chief executive officer.
Xerox reported third-quarter GAAP EPS from continuing operations of 17 cents, up 21 cents compared to the same period last year, primarily due to a prior-year charge related to the company’s Health Enterprise strategy change. Adjusted EPS of 27 cents was within the company’s guidance and in line with the same period last year. Adjusted EPS excluded $105 million or 10 cents per share of after-tax costs related to the amortization of intangibles, restructuring and related costs, certain retirement related costs and separation costs.
Burns added, “As we move toward 2017, we remain intensely focused on implementing our strategic priorities to position both new companies for improved profitability and long-term growth that will create sustainable value for our shareholders.”
Third-quarter total revenue of $4.2 billion was down 3 percent year-over-year, or 4 percent on an adjusted constant currency basis.
Operating margin of 9.2 percent was down 0.2 percentage points year-over-year. Gross margin and selling, administrative and general expenses were 31.0 percent and 19.6 percent of revenue, respectively.
Services segment revenue of $2.4 billion was up 1 percent, or down 2 percent on an adjusted constant currency basis. Services margin improved 1.6 percentage points year-over-year on an adjusted basis to 9.4 percent, driven by significant productivity and cost savings across the company’s BPO business.
Document Technology revenue was $1.6 billion, down 9 percent or 7 percent in constant currency. Document Technology margin remained strong at 13.1 percent, down 0.8 percentage points year-overyear but up 0.5 percentage points sequentially, reflecting continued productivity gains and cost savings from the company’s strategic transformation program.
Xerox generated cash flow from operations of $370 million during the third quarter, up from $271 million in the same quarter last year. The company ended the quarter with a cash balance of $1.4 billion.